Bancolombia (CIB) AI Stock Analysis

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Bancolombia

(NYSE:CIB)

77Outperform

Bancolombia demonstrates strong financial performance with robust revenue and profit growth, a positive technical outlook, and attractive valuation metrics. The low P/E ratio and high dividend yield are particularly appealing. Despite some challenges such as cash flow issues and sector-specific underperformance, the positive macroeconomic environment and strategic initiatives suggest a favorable outlook.

Positive Factors

Earnings

El Salvador’s earnings rose 12% QoQ and 30% YoY supported by strong NII growth and lower provision charges.

Market Positioning

Bancolombia is well positioned to benefit from a nascent macroeconomic recovery.

Valuation

At current valuation of 0.9x P/BV, the risk-reward appears highly compelling.

Negative Factors

Earnings Limitation

Bancolombia’s earnings are seen as being limited due to NIM pressure from lower rates.

Financial Performance

Panama’s earnings significantly declined due to weaker core revenue generation and higher operating expenses.

Taxation

Tax rate increased to 28% on no longer having the tax exempts of 2Q24.

Bancolombia (CIB) vs. S&P 500 (SPY)

Market Cap

$11.10B

Dividend Yield14.64%

Average Volume (3M)517.50K

Price to Earnings (P/E)12.4

Beta (1Y)0.52

Revenue Growth-0.15%

EPS Growth8.78%

CountryUS

Employees34,114

SectorFinancial

Sector Strength84

IndustryBanks - Regional

Share Statistics

EPS (TTM)3.42

Shares Outstanding113,030,600

10 Day Avg. Volume389,051

30 Day Avg. Volume517,497

Financial Highlights & Ratios

PEG Ratio1.41

Price to Book (P/B)N/A

Price to Sales (P/S)1.64

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$36.00

Price Target Upside-14.95% Downside

Rating ConsensusModerate Sell

Number of Analyst Covering1

Bancolombia Business Overview & Revenue Model

Company DescriptionBancolombia S.A. provides banking products and services in Colombia, Panama, Puerto Rico, El Salvador, Costa Rica, and Guatemala. The company operates through nine segments: Banking Colombia, Banking Panama, Banking El Salvador, Banking Guatemala, Trust, Investment Banking, Brokerage, International Banking, and All Other. It offers checking and savings accounts, fixed term deposits, and investment products; trade financing, loans funded by domestic development banks, working capital loans, credit cards, personal and vehicle loans, payroll loans, and overdrafts; financial support to real estate developers and mortgages for individuals and companies; factoring; and financial and operating leasing services. The company also provides hedging instruments, including futures, forwards, options, and swaps; and brokerage, investment advisory, and private banking services, including selling and distributing equities, futures, foreign currencies, fixed income securities, mutual funds, and structured products. In addition, it offers cash management services; foreign currency transaction services; life, auto, commercial, and homeowner's insurance products; and online and computer banking services. Further, the company provides project and acquisition finance, debt and equity capital markets, principal investments, M&A, hedging strategies, restructurings, and structured financing; money market accounts, mutual and pension funds, private equity funds, payment and corporate trust, and custody; internet-based trading platform; inter-bank lending and repurchase agreements; managing escrow accounts, and investment and real estate funds; and transportation, securities brokerage, maintenance and remodeling, and outsourcing services. As of December 31, 2021, it operated 1,015 branches; 28,676 banking correspondents; 529 PAMs; 210 kiosks in El Salvador and 187 in Colombia; and 6,094 ATMs. Bancolombia S.A. was incorporated in 1945 and is headquartered in Medellín, Colombia.

How the Company Makes MoneyBancolombia generates revenue through a diversified business model that includes interest income, fees, and commissions. The bank earns interest income primarily from lending activities such as personal loans, mortgages, and commercial loans. Additionally, Bancolombia benefits from fees and commissions on various services, including credit card transactions, asset management, insurance products, and financial advisory services. The bank also engages in treasury operations, trading, and investment activities to optimize its financial performance. Strategic partnerships and collaborations with fintech companies and other financial institutions further enhance its revenue streams by expanding service offerings and improving operational efficiency.

Bancolombia Financial Statement Overview

Summary

Bancolombia exhibits strong revenue and profit growth, reflecting robust performance in the banking sector. While the balance sheet shows prudent leverage management, there is a need for better equity utilization. Cash flow challenges, particularly in 2024, signal a need for enhanced cash management strategies. Overall, the company demonstrates financial stability with areas for operational improvement.

Income Statement

Positive

The income statement shows strong growth in total revenue and net income over the years, with a revenue increase from 2023 to 2024. The gross profit margin is solid at 100% due to the nature of the banking industry. The net profit margin for 2024 is approximately 28.3%, indicating high profitability. However, the EBIT margin has fluctuated, which suggests varying operational efficiencies.

Balance Sheet

Positive

The balance sheet reflects a stable equity base with a debt-to-equity ratio of about 0.44 in 2024, indicating a well-managed leverage position. The equity ratio stands at around 11.7%, showing moderate reliance on equity for asset financing. However, the return on equity of approximately 14.4% suggests room for improved equity utilization.

Cash Flow

Positive

The cash flow statement highlights negative free cash flow in 2024, which raises concerns about cash management, despite positive operating cash flow in prior years. The operating cash flow to net income ratio is negative for 2024, suggesting issues in converting profits into cash flows. Improvements in cash flow efficiency are needed for better financial health.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
22.18T	20.88T	24.21T	17.36T	15.72T
	Gross Profit
22.18T	47.08T	19.31T	17.36T	15.72T
	EBIT
11.01T	10.27T	17.02T	5.86T	269.41B
	EBITDA
0.00	10.27T	0.00	0.00	0.00
	Net Income Common Stockholders
6.27T	6.12T	6.78T	4.09T	275.99B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
19.62T	11.65T	24.72T	23.15T	20.19T
	Total Assets
10.00T>	10.00T>	10.00T>	10.00T>	10.00T>
	Total Debt
19.20T	32.09T	41.17T	31.46T	32.15T
	Net Debt
-419.94B	127.11B	16.45T	8.32T	11.96T
	Total Liabilities
10.00T>	10.00T>	10.00T>	10.00T>	10.00T>
	Stockholders Equity
43.54T	38.09T	39.09T	32.23T	26.55T
Cash Flow		Free Cash Flow
-19.94T	16.74T	3.03T	3.91T	9.70T
	Operating Cash Flow
-17.89T	19.15T	6.56T	6.10T	11.23T
	Investing Cash Flow
-559.20B	-159.69B	-4.65T	-650.49B	-7.52T
	Financing Cash Flow
9.09T	11.59T	853.44B	-6.81T	-4.92T

Bancolombia Technical Analysis

Technical Analysis Sentiment

Positive

Last Price42.33

Price Trends

50DMA

39.09

Positive

100DMA

35.07

Positive

200DMA

31.78

Positive

Market Momentum

MACD

0.71

Negative

RSI

62.69

Neutral

STOCH

93.32

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CIB, the sentiment is Positive. The current price of 42.33 is above the 20-day moving average (MA) of 39.80, above the 50-day MA of 39.09, and above the 200-day MA of 31.78, indicating a bullish trend. The MACD of 0.71 indicates Negative momentum. The RSI at 62.69 is Neutral, neither overbought nor oversold. The STOCH value of 93.32 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CIB.

Bancolombia Risk Analysis

Bancolombia disclosed 38 risk factors in its most recent earnings report. Bancolombia reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Bancolombia Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SUPV	81 Outperform	$1.48B	10.14	19.64%	0.98%	-44.77%	-10.25%
CIB	77 Outperform	$11.10B	12.38	15.62%	14.64%	-0.15%	8.78%
ITUB	76 Outperform	$61.29B	9.54	20.84%	5.65%	-7.01%	15.18%
GGAL	71 Outperform	$10.42B	5.72	38.13%	3.96%	-35.65%	70.23%
BBD	70 Outperform	$23.64B	7.89	10.44%	1.25%	-8.55%	13.58%
BSBR	70 Outperform	$18.37B	14.92	11.61%	4.41%	-3.94%	31.52%
Sector *	63 Neutral	$12.31B	9.55	7.88%	79.24%	12.71%	-4.71%

* Financial Sector Average

Performance Comparison

CIB

Bancolombia

42.33

13.85

48.63%

BBD

Banco Bradesco SA

2.38

-0.17

-6.67%

BSBR

Banco Santander Brasil

4.96

-0.24

-4.62%

GGAL

Grupo Financiero Galicia SA

63.41

34.40

118.58%

ITUB

Itau Unibanco

6.14

0.88

16.73%

SUPV

Grupo Supervielle SA

15.84

9.74

159.67%

Bancolombia Earnings Call Summary

Earnings Call Date:Feb 19, 2025

(Q4-2024)

% Change Since: 12.85%|

Next Earnings Date:May 05, 2025

Earnings Call Sentiment Positive

Bancolombia S.A. demonstrated strong financial performance with improved ROE, increased net income, and effective cost control, despite some challenges such as NIM compression and underperformance in Banistmo. The macroeconomic environment showed positive trends, including reduced inflation and economic growth, supporting a favorable outlook.

Q4-2024 Updates

Positive Updates

Net Income and Loan Growth

Net income for the quarter amounted to 1.7 trillion pesos, reflecting an 11% increase due to resumed loan growth and a significant reduction in provision expenses.

Return on Equity (ROE) Improvement

Overall, the return on equity for the quarter increased to 15.7%. Net income for the year was 6.3 trillion pesos, a 2.5% increase, boosting shareholders' equity by 14.3% and resulting in a 15.8% ROE.

Proposed Dividend Increase

A proposed dividend amounting to approximately 3.8 trillion pesos, representing a 10.3% year-over-year increase, achieving a payout ratio of 60%.

Macroeconomic Performance

The Colombian economy expanded at an annual rate of 1.7% in 2024. Inflation continued its downward trend, reaching 5.2% by year-end.

Digital and Multichannel Platform Expansion

Launched the Tuz Jabbas program, enhancing interoperability and financial inclusion. Bancolombia S.A. now serves 6 out of 10 Colombians, managing 33% of the country's payrolls.

Improvement in Asset Quality

Loan deterioration decreased, with net provision expenses falling by 41% quarter over quarter and the cost of risk for the year reaching 2.1%.

Sustainability Initiatives

Bancolombia S.A. scored 85 out of 100 in the Dow Jones Sustainability Index and ranked first in America.

Negative Updates

Net Interest Margin Compression

Net interest margin for the quarter was 6.4%, a 42 basis point reduction, and 6.8% for the full year, a 20 basis point contraction due to a lower-yielding portfolio.

Banistmo's Performance in Panama

Banistmo's net income dropped 56%, resulting in a 4.5% ROE for the year due to lower net interest income and higher provision expenses.

Operating Expenses Increase

Operating expenses increased 13.4% compared to the previous quarter, with a cost-to-income ratio of 49% compared to 45% the previous year.

Challenges in Specific Sectors

Underwhelming performance from mining, manufacturing, and housing sectors continued to reflect challenges in the Colombian economy.

Company Guidance

During Bancolombia S.A.'s fourth quarter 2024 earnings call, the company provided comprehensive guidance for 2025. Bancolombia anticipates a consolidated loan growth of 5.6%, slightly below previous projections, attributing the adjustment to SAFE's loan growth in the previous quarter. The net interest margin is projected to be around 6.2%, dependent on the central bank's rate-cutting pace. The cost of risk is expected to range between 1.9% and 2.1%, while the efficiency ratio is anticipated to be approximately 51%. The bank also forecasts a return on equity of around 14% and a core equity tier one ratio between 11% and 11.5%. Additionally, Bancolombia announced a proposed dividend of approximately 3.8 trillion pesos, representing a 10.3% year-over-year increase and a payout ratio of 60%, with the dividend to be paid in a single installment of 3,900 pesos per share on April 1, 2025. The call also highlighted progress towards establishing Grupo Sura as the new holding company, with regulatory approvals obtained from Central American regulators and ongoing processes with the Colombian regulator, aiming for completion by the second quarter of 2025.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.